Pros/cons to AEC industry pros earning advanced degrees

Professionals working in the AEC (Architecture, Engineering & Construction) industry who want to advance their education are faced with at least two potential options – an MBA or an advanced architecture, engineering or construction management degree. Ultimately, the choice depends on individuals and their career aspirations.  

Architects, engineers and construction managers are problem solvers. They are strategic and analytical, examining complex issues from all perspectives. Their qualitative and quantitative skill sets already differentiate them when they leave school and start a career in the business world. The architect, engineer and construction manager have the academic background and technical skills that enable them to understand design and construction and to speak with customers, consult clients, and lead teams in a business setting. 

Many AEC professionals are faced with an important question: “Should I get an advanced degree to move my career forward?” Today, nearly a third of employers across the U.S. are bumping up education requirements for new hires, according to Career Builder. Companies are looking for candidates with a master’s degree or higher to be innovative leaders with a strategic perspective. 

Two possible education paths are offered to AEC professionals working in industry — a master’s in business administration (MBA) or an advanced professional degree (master’s and/or Ph.D.). There are several factors to consider when making the decision.  

Completing an MBA program demonstrates a commitment to learning, improving, and applying skills that can help a company succeed. Professionals with MBAs also feel a greater sense of confidence in their marketability, as well as the ability to bring a wealth of information to various endeavors.  

Here are a few of the advantages of getting an MBA.  

Increased Global Market Awareness:  

MBA graduates had opportunities to have close contact with other students from around the world that bring different work experiences and perspectives on the global economy. MBA students can expand their knowledge of other industries in the U.S. and internationally.  

Improved Communication Skills 

Effective communication is a critical fundamental skill required for professionals to succeed. Communication may be considered a “soft skill” compared to “hard skills” but it is very valuable. An MBA can help sharpen verbal and written communication skills, allowing AEC professionals to successfully convey concepts to different people at different levels of an organization to ensure everyone is able to work together toward a common goal.  

Expanded Professional Network 

An MBA graduate becomes part of a global network of a significant number of alumni, which provides the graduates access to connect with a large network. There is a significant opportunity to build relationships with other professionals in the classroom and beyond. 

Increased Job Opportunities 

An advanced degree can help differentiate AEC professionals from their peers in a highly competitive marketplace. An MBA can be an asset in any industry. Employers typically look to hire or promote a candidate with an MBA because they have skills in marketing and finance that others within the organization may lack. This allows them to have a jumpstart to take up various initiatives and help their company increase profits.  

Improved Time Management  

An MBA program requires juggling extracurriculars alongside a challenging course load — not to mention other personal and professional pursuits. Obtaining an MBA can help AEC professionals manage their time effectively, which is an in-demand skill among employers and a valuable life skill. 

Deciding which degree to pursue requires a critical consideration of a person’s passion. An MBA degree and an advanced technical degree each take considerable time and money. Working before going back to school can help determine the best career path. The degree pursued depends on focusing on rising to the C-Suite in the corporate world or starting a business.  

Pros and Cons of: 

MBA Degree 

PROS:An MBA can help gain business knowledge outside a technical specialty, build a professional network and help those aspiring to a management role 

CONS: MBAs can be expensive, take time to earn, and MBA classroom knowledge can seem outdated compared with the speed at which technology innovates. 

Specialized Master’s Degree 

PROS: The Specialized Master’s Degree is less expensive, takes less time, requires less work experience, and provides potential for a greater impact in a specific field.  

CONS: Specialized Master’s Degree graduates gain lower salaries than MBA degree graduates, have no internship, engage in a more arduous program, and gamble on the quality of some programs that were created hurriedly and not strategically designed. 

It’s important for AEC professionals to decide if they want to be a subject matter expert or a manager. If there is a passion for architecture, engineering or construction and being on the technical side of things, then an advanced technical degree puts them at the top of their field. But, if AEC professionals are excited about working at a macrolevel in business and managing teams or considering an entrepreneurial endeavor, then an MBA is the right choice. An undergraduate architecture, engineering or construction background provides problem-solving skills and critical thinking methodology that serve them well in any career, regardless of which choice is made.  

“An MBA is a great degree for career paths like investment banking, finance, consulting and large companies. An MBA is not necessarily the right path for starting a tech company. You should be building a prototype, not getting an MBA in that case.” Guy Kawasaki, an American marketing specialist, author, and Silicon Valley venture capitalist. He was one of the Apple employees originally responsible for marketing their Macintosh computer line in 1984.  

Glenn Ebersole is a registered professional engineer and the Director of Business Development at JL Architects, a nationally licensed commercial architecture firm based in West Chester. He can be contacted by [email protected] or 717-575-8572. 

Actalent anticipates positive impact of new Pa. workforce project

When Gov. Josh Shapiro signed an executive order on July 31 establishing the Commonwealth Workforce Transformation Project (CWTP), he put into law the nation’s first workforce training program to take advantage of federal infrastructure funding.

Justin Thomas, a Delaware County native and senior recruiter with Actalent, a global leader in engineering and sciences services and talent solutions, sees the potential benefits the CWTP brings to Pennsylvania.

“I definitely can see it having a positive impact within the Pa. industry, especially from a construction standpoint,” Thomas said. “In our division at Actalent, we deal a lot with federally funded projects that support our clients. COVID obviously slowed everything, and projects are still on the backburners for a lot of companies nowadays.

“Whether it be being able to invest in employees and in projects from a certification standpoint, training and development, I could really see (CWTP) help get more people into the industry, with that additional training and funding that they can offer.”

Thomas knows firsthand the construction industry and the challenges it faces.

“My dad’s in the trades,” he said, “and I worked in construction my whole life before going to college.”

Today, the Bloomsburg University product manages Actalent’s Architecture, Engineering, and Construction (AEC) recruiting team for Pennsylvania, New Jersey, and Delaware. Thomas and his

team specialize in helping construction and engineering professionals build their careers across different client projects in the region.

He was intrigued when he first learned of the historic workforce program that the Shapiro Administration believes will help accelerate investments in infrastructure development – including repairing roads and bridges, and modernizing energy, water, and sewer infrastructure across the state.

“It’s been very informative to read about the program,” said Thomas. “I’m excited for the Pa. market in general, especially for getting work done. We’re able to partner with our clients and really talk through this and how it can help them, from a training and development purpose and from resources as well, whether that be supply chain issues from this year or dating back to last year, project deadlines, things like that.”

From a construction standpoint, Thomas said he’s eager to see how the program is going to boost the Pennsylvania job market as well as the state’s economy.

“A lot of construction and conceptual design projects, anything that was put on hold when we were in quarantine (during the pandemic), I think this will accelerate that forward. I’m excited to see the positive effects of this program.”

To fund workforce development, Pennsylvania will reserve at least 3% of funding it receives from the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA). This funding from the IIJA and IRA could lead to as much as $400 million being used for workforce training in Pennsylvania over the next five years. It is the largest infusion in funding for workforce training in state history, with as many as 10,000 new jobs in Pennsylvania being supported by CWTP.

“My understanding of the program is that it’s going to be for employers and employees that would be having funding from the Infrastructure Investment and Jobs Act or the Inflation Reduction Act,” said Thomas. “I believe from a project standpoint it’s going to be up to $400,000 in additional funding for those projects funded federally from the Commonwealth of Pennsylvania. And up to $40,000 in additional funding for new employees as well.”

Knowing the construction industry is struggling to find workers, Thomas anticipates the program positively impacting the industry in Pa. and sees how companies in the state can best utilize the new funding offered through CWTP.

“In today’s economy from what I can see, there are a ton of jobs out there but not necessarily a ton of people for those jobs, whether that be qualification based or that the unemployment rate is very low within the construction area,” he said. “I think that could really be a segue where companies can use that to gain more workers, individuals coming from different backgrounds of education, certification level where that can really help move projects forward with training and development.”

Regarding education and certification, Thomas said the program could benefit those seeking certain certifications, including the challenging OSHA 10 and OSHA 30 courses. OSHA 10 is a 10-hour safety course covering general safety and health hazards for entry-level workers. OSHA 30 is a 30-hour safety course that provides an increased variety of safety subjects along with in-depth, industry-specific training. The latter is intended for supervisors and workers with safety and health responsibility.

“For some of the clients that we work with in central Pa. and in the Philadelphia market as well, having individuals with construction background, construction labor trying to get more technical, trying to earn those Osha 10, Osha 30, American Concrete Institute type of certifications, this is something that can help as workers enter the industry,” said Thomas.

He said additional education, which Actalent helps clients with, will be hastened through CWTP.

“This is going to accelerate that process for companies to gain more workers,” Thomas said, “and effectively get work done quickly.”

Verizon upgrades Harrisburg network

Verizon has made major upgrades to the network serving customers in the Harrisburg area, part of a multi-year redesign of its network architecture to stay ahead of exponential data usage increases and upgrade the network’s technology.

Network upgrades include deploying new cell sites to extend coverage and capacity in local communities; adding more capacity on fiber optic cables to move more data through the network; and adding bandwidth to the cellular network to accommodate new services like wireless internet service for homes and businesses.

Engineers have deployed 5G Ultra Wideband service using Millimeter Wave, its premium, high-band spectrum that allows for extremely fast speeds and massive capacity as well as C-band spectrum designed for fast speeds, high capacity and wide coverage. In the Harrisburg market, 87% of the population now has access to 5G service from Verizon.

The addition of 5G service and additional wireless solutions allow far more data to travel on the wireless network in Harrisburg. That requires upgraded fiber optic cable links. Verizon has increased the capacity on the fiber connections in many cell sites in the Harrisburg area so they can carry 10 times the amount of data.

“Our network engineers work tirelessly to ensure we can provide the most reliable connections across Harrisburg,” Kevin Smith, vice president of network engineering and operations for Verizon, said in a release. “We will continue to unlock the power of 5G for our customers with better connectivity for their phones, homes and businesses, as part of our ongoing commitment to this community.”

Verizon 5G Ultra Wideband service has also recently been deployed in Camp Hill, Big Pine, Frogtown, the majority of eastern Cumberland County, central and southern Dauphin County, central and northern York County, Lebanon County and western Lancaster.

Paula Wolf is a freelance writer

Mechanicsburg company plans new tanks to protect water quality

Plans to rehabilitate eight water storage tanks and construct five new tanks were announced Thursday by the Pennsylvania American Water company.

The Mechanicsburg-based company’s rehab program of inspecting, sandblasting, and repainting tanks is expected to cost approximately $17.5 million and will help protect water quality and extend the tank’s service lives. 

Bruce Aiton, vice president of engineering at Pennsylvania American Water, said storage tanks help provide suitable water pressure for communities and storage reserves for fire protection. 

“Protectively maintaining and rehabilitating tanks where there are opportunities to do so provides cost benefits to our customers,” Aiton said in a statement, “and building new tanks helps provide additional capacity for community growth and system resiliency.” 

Pennsylvania American Water will rehabilitate and repaint ground storage tanks this year in several municipalities, including Swatara Township in Dauphin County and Fairview Township in York County.

Pennsylvania American Water crews will rehabilitate the tanks by striping original paint and apply a new coating, the latter serving as a protective barrier that prevents steel from rusting and impacting water quality. Customers should not experience impacts on their water service during construction.

Five new ground storage tanks will also be constructed in multiple municipalities, including Walker Township in Schuylkill County, to provide additional water storage capacity. This construction will help Pennsylvania American Water continue to deliver water service to meet customer demand and provide fire protection.

Central Pa., Lehigh Valley represented by student entrepreneurs

Student entrepreneurs will represent central Pennsylvania and the Lehigh Valley in the final round of the annual State System Startup Challenge, the Pennsylvania State System of Higher Education (PASSHE) announced. 

Jake Hill of Camp Hill and a student at West Chester University, and Stelios Melekos of Churchville and East Stroudsburg University, will join Victoria Heffelfinger of North Huntingdon and Pennsylvania Western University (PennWest) in featuring products and services in high demand. The three finalists will pitch their business plans to judges today for an opportunity to gain funds for their startup or expand their existing business. 

The student entrepreneurs will discuss products in three academic areas within PASSHE universities and three industries with worker shortages – education, healthcare, and business. The start-up challenges fit with PASSHE universities’ efforts to address workforce shortages in education, healthcare, business, social services, engineering, and computer science. 

“These student entrepreneurs have innovative and exciting startups that combine business, healthcare and education, which are three fields in high demand in Pennsylvania,” said Board of Governors Chairwoman Cynthia D. Shapira. 

“State System universities are preparing thousands of students for success as entrepreneurs, and I commend the supportive faculty and the remarkable ingenuity and energy of the students.” 

Henry is a senior Bachelor of Applied Science student with a pharmaceutical product development concentration. His business plan is Lectra Technologies LLC, which produces Lectra Tape to help people navigate their rehabilitation process and complete physical therapy. 

Lectra Tape is conductive kinesiology tape that delivers electrical pulses from a wireless muscle stimulator to aid in the healing and rehabilitation process. Sensors in the tape collect data that is analyzed and shared with the user and physical therapists, so they can adjust rehabilitation plans to provide the best results and encourage the individual to continue their physical therapy. 

Melekos is a junior business management student with a concentration in entrepreneurship. Melekos’ business is Blitz Performance LLC, which provides anglers with the highest quality and most innovative lures and apparel for both saltwater and freshwater fishing. Blitz Performance products are available to retail customers online at blitzfishingperformance.com and wholesale at tackle shops across five states. Blitz Performance looks to build a sense of community around the brand by developing the tools to catch more fish and make the most of anglers’ time on the water. 

Heffelfinger is a freshman special education student. Her business plan is Wildlife Water School LLC, an aquatic instruction school that provides swimming lessons for people ages 6 months and older. Offering an inclusive environment for people of all abilities and backgrounds, the school provides basic skills, infant swimming resources, and advanced instruction. Specialized lessons for people with disabilities or other challenges are also available. Wildlife Water School intends to offer aquatic therapy in the future. 

First prize is $10,000, and second- and third-place finishers will receive respective prizes of $5,000 and $2,500. The finalists were selected from more than 60 students and student teams from across the state-owned public university system. 

The Pennsylvania Cable Network (PCN) will air the competition live tonight at 7. The program can also be viewed live on PCN Select. 

“The ingenuity and energy of these finalists speaks volumes about the spirit of innovation that is thriving at our universities,” Chancellor Dan Greenstein said. “Several past winners of this competition have launched their own businesses from the ideas born of this real-life experience, and I look forward to the new businesses that may emerge from this year’s competition.”

PASSHE addresses ‘critical’ teacher shortage

The plight of Pennsylvania’s workforce shortage has hit the education sector particularly hard. 

A press release by Pennsylvania’s State System of Higher Education (PASSHE) states that the number of new certified teachers in the state since 2011 dropped by nearly 67%. In 2020-21, Pennsylvania issued more emergency teaching permits than new teacher certifications. 

As job growth in the Pre-K to 12 education field is expected to be 6% by 2030, more than 10,000 additional educators and teachers will be needed than Pennsylvania currently has. A shortage of new teachers can leave public and private schools with fewer candidates to fill jobs. Additionally, students may be left without a regular teacher as shortages in educators can also cause larger class sizes and require other school staff to fill in.  

PASSHE said it is addressing the teacher shortage by seeking $112 million in state funding to produce more graduates in six in-demand, high-growth jobs, including education. PASSHE would use $56.5 million to provide direct financial relief to education students, saving each student an average of $1,500. High-need students could receive an additional $5,000, for a total of $6,500 per year. 

PASSHE discovered shortly before its recent House Appropriations Committee hearing that its description of the funding request was confusing to some legislators. To reduce confusion, it has changed slightly how it describes its request. 

To clarify, PASSHE is seeking the $112 million in state funding, mostly for financial aid, to enable more students to afford the education necessary for six targeted careers with worker shortages. This combined with a 3.8% ($21 million) inflationary increase in base funding would enable PASSHE’s Board of Governors to consider freezing tuition for an unprecedented fifth consecutive year. 

By making a degree more affordable, PASSHE expects more Pennsylvanians will be encouraged to pursue careers in the teaching profession. 

Along with teaching, the careers targeted by PASSHE are nursing, social services, business, and the STEM fields of engineering and computer science. 

Small businesses’ growth and diversity highlight new study

Data from a new study provides a guide for the Small Business Administration (SBA) to help ensure America’s small businesses can grow and diversify their revenue through trade. 

“SBA’s new research gives insight into the broader impact and opportunity for America’s small business exporters, with findings showing significantly more small businesses exporting than previously reported,” Administrator Isabella Casillas Guzman said in a statement.

“The data provides a better guide for the SBA to help ensure America’s small businesses can grow and diversify their revenue through trade. We will continue to strengthen our capacity to provide resources that small exporters need to compete in the global marketplace and power our nation’s economy.”

The SBA released its findings from a commissioned study on the Total Addressable Market (TAM) of small business exporters in America.  Among the study’s key findings is new data, based on recent business surveys, that places the number of exporting small businesses at 1.3 millionan increase of nearly five times the estimates previously published by the federal government. 

The research also places the potential market size, or total addressable market, at over 2.6 million small businesses, representing 42 percent of all small employer businesses.  

“We know that small businesses are the engine that drives the U.S. economy, and we can now tell a better and more comprehensive story of the importance of exporting for small businesses,” said Associate Administrator for International Trade, Gabriel J. Esparza. 

“We will use this research to support and advance the global market success of U.S. small businesses and evolve our products and services to better meet the needs of those current and future small business exporters.” 

Small business exporter numbers have traditionally been derived by the federal government primarily from U.S. Census Bureau surveys and goods export data. According to the latest official data from 2020, there were approximately 264,000 small business goods exporters in the U.S. The data does not account for overseas shipments valued at less than $2,500 and service exports, including software as a service. 

The study’s research reveals the highest concentrations of small business exporters and exports exist within a variety of manufacturing, wholesale, plastics and chemicals, medical equipment, and computer systems design firms, as well as management consulting, architectural, engineering, legal, and software service providers. 

Another focus with both goods and services exporters are emerging industries, such as green technology industries, as there is a global demand for technologies and services benefiting the environment. 

PASSHE seeks $112M to bolster engineering education

The Pennsylvania State System of Higher Education said that it has a plan to help address the shortage of engineers.  

The State System is seeking $112 million in state funding to produce more graduates in six in-demand, high-growth jobs, including engineering.   

It said that Pennsylvania and the nation have a persistent shortage of engineers needed to build critical infrastructure, such as expanded broadband, roads and bridges, water services, and rail, air and clean energy projects, and to support manufacturing and other opportunities in the economy. 

It cautioned that unless we strengthen the talent pipeline by educating and training more engineers, these projects risk being delayed, scaled back, or eliminated.
PASSHE would allocate $3 million¬ to support engineering – $1.5 million to expand the high-cost program and $1.5 million to provide direct financial relief – saving high-need engineering students an average of $5,000 per year.

Making a degree more affordable would encourage additional people to pursue careers as civil engineers, electrical engineers, industrial engineers, mechanical engineers and more, PASSHE said.

Separately, PASSHE is seeking $573.5 million, an inflationary increase of $21 million, enabling the board of governors to consider freezing the basic in-state undergraduate tuition rate for an unprecedented fifth consecutive year. 

New jobs, higher pay, career advancement are aims of new PASSHE registry

Pennsylvania’s State System of Higher Education (PASSHE) is creating the state’s first credential registry to help prepare students of all ages for in-demand careers and strengthen the workforce. 

The project is funded by Pennsylvania’s Department of Labor & Industry and American Rescue Plan funds appropriated by PASSHE. 

Initially, the State System’s credential registry will include in-demand programs such as business, computer science, education, engineering, nursing, and social services. The first phase of the credential registry is anticipated to be ready in 2024.  

A press release from PASSHE stated the on-line tool is user-friendly and will aid students and workers in navigating education and professional credentials. Users will be enabled to make informed decisions regarding their opportunities. 

The credential registry can be used by the public to learn which credentials exist, where to obtain them and in what order, and which skills employers seek for jobs in high demand. The registry will explain which credentials are sequenced, possibly leading to a bachelor’s degree and beyond. 

PASSHE Chancellor Dan Greenstein said the State System is redesigning itself to meet the needs of learners and provide a pipeline of talented individuals that employers are seeking. He added that the credential registry is a key part of the process. 

“Credentials add value to your resume by demonstrating to employers that you have the education and latest skills to do the job,” said Greenstein in a statement. “Students and job seekers will be able to use the credential registry to understand the pathways to earn credentials that open doors to new and higher-paying jobs.” 

The State System is partnering with the non-profit Credential Engine in creating the online credential registry.

“Pennsylvania’s design for this work is exemplary,” said Scott Cheney, CEO of Credential Engine. “Focusing on quality, stackability and pathways will help students and workers be better able to navigate their way through all types and levels of credentials to the skills needed by employers. Having all that information in an open credential registry is an important first step.”

A credential registry will be an important tool to address the labor shortage. Currently, 60% of Pennsylvania jobs require higher education, yet only 51% of workers have education after high school. Helping the state’s workforce earn credentials can close the talent gap, and credentials such as badges, certificates, licenses, apprenticeships and industry certifications can be earned as two- or four-year State System academic programs.  

Credentials can be earned at the learner’s pace. In short-term programs, learners can enter higher education, earn a credential while working and go on to the next credential or leave higher education for the workforce. They can return to the program to earn advanced credentials to build skills to advance their career or earn a higher income. 

The State System is expanding credentialing within academic courses so students can earn credentials on route to their degree. The online registry’s largest benefit may go to working adults, especially those with some college and no credential, or those in entry-level positions who need to improve their skills to keep up with automation and technology. 

In a press release issued by PASSHE, a Pennsylvania-specific registry enables employers to identify the credentials most relevant to their hiring needs.

Area engineering companies honored for impactful projects

Several Central Pennsylvania engineering firms were honored recently by the American Council of Engineering Companies of Pennsylvania (ACEC/PA). 

The companies were honored at the ACEC/PA’s annual Diamond Awards for Engineering Excellence. Their award-winning projects combined safety measures, engineering, and designs. 


Roseline Bougher, president of ACEC/PA’s board of directors, said in a statement that engineering firms from across Pennsylvania submitted entries for design, safety, and engineering projects aimed at building better, stronger communities. 


“The selection process was difficult, but we believe these 12 awards and special honors represent the very best of Pennsylvania’s engineering consulting industry,” Bougher said. “We take great pride in watching our member firms bring these critical projects to fruition, often in the face of tough obstacles along the way. 


“It has been exciting to see these firms push themselves to achieve such fantastic results for their clients and truly work to create a better Pennsylvania.” 


Diamond Award-winning projects created needed facilities, improved upon and strengthened infrastructure, increased public safety, worked collaboratively with important clients, and remained conscious of their environmental impacts. 


Area award-winners and projects included the following: 


  • The Award for Transportation: McCormick Taylor for the completion of the Interstate 83 East Shore Section 1 project. 
  • The Diversity, Equity, and Inclusion Award: Lancaster-based RETTEW Associates and Kleinfelder. 
  • The Client Distinction Award: Mike Keiser, former PennDOT deputy secretary for highway administration. 
  • The Best Panel Award: Johnson, Mirmiran & Thompson for the King Street Station Renovations project in York. 
  • The Award for Special Projects: Mechanicsburg-based HDR Engineering for the completion of the I-579 Urban Open Space Cap project. 

Strategic Financial Management Is Critical for AEC Firm Success

Architectural, engineering and construction (AEC) firms are designing, planning, constructing and leading projects worth hundreds of millions of dollars. These firms provide professional services that impact the quality and success of those projects. There is a public misconception that these types of businesses are highly profitable, but that is not always true. Some AEC firms maintain a decent profit margin, while many others struggle financially. 

There are many reasons why AEC firms are not profitable enough, but one main reason is poor financial management. Strategic financial management is essential for any business to be successful and sustainable. Strategically managed finances can result in a great success story or in a fatal nightmare if finances are not controlled.  

Architects, engineers and construction professionals do not get much business education relative to running a business while working on their professional degrees. And that is one of the major challenges these professionals face in running their business. 

Slow paying clients are one major challenge in the AEC industry in today’s economy. The problem of not being paid on time is a very serious issue for small and large firms. The issue is exacerbated because it is occurring when AEC firms are having significant difficulty staffing up to meet demands of their existing and new clients.  

Strategic thinking is critical to determine what strategies need to be considered for financial profitability. Strategies are needed to diversify clients and professional services to ensure a stable flow of income for firm growth and pricing projects accordingly.  

Working capital is a problem that many people in business do not understand and AEC firms need much more focus and education to deal with it. Wikipedia defines working capital as current assets less current liabilities. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit and negative working capital. 

Positive working capital is required so an AEC firm is able to continue its operations and also have sufficient funds to satisfy short-term debt and ongoing operational expenses. An AEC firm’s current assets typically include accounts receivable. However, in reality that is not true if clients take a year to pay their bills.  

AEC firms must have enough cash to keep meeting payroll and all other overhead expenses for the time it takes clients to pay their bills for work performed by their firms. AEC firms must stop tolerating slow-paying clients and acting as a bank to finance their clients’ businesses and projects.  

Strategies that AEC firms must incorporate into their planning include: pursuing specific vertical markets and project types that are “recession resilient;” strategic focus on “Go – No Go” decisions on clients and projects; considering diversified business relationships and developing new strategic partnerships with other firms.  

Strong financial management deploys tools to achieve success. Some of those tools include:  

A management strategy for the direction of the firm. A forward look at the next quarter and the rest of the fiscal year, the next year, the next 2-3 years are important to determine that direction. The firm needs to set aside time to review and reflect on current workload and backlog, prospects in the pipeline, capacity to handle increased workload, any new skills or services needed, project management models, existing and desired clients, market trends, overall goals for the firm and other factors anticipated to impact the AEC industry.  

Agility and adaptability are two key words for the future in the AEC world. The pandemic certainly highlighted the need for each of those attributes. A successful AEC firm must be able to adapt to changes in the industry, the economy, markets and unforeseen influences that will impact their business.  

Business development is another critical tool for success in AEC firms. A firm cannot simply rely on work coming to them unsolicited and without strong ongoing relationships. Business development is a full-time task and is a “contact sport” that requires time to build and enhance relationships, research markets and forecasts, identify and qualify opportunities and work with the team to secure contracts and keep in touch periodically with clients during current projects.  

Another very critical tool relates to developing strategic and realistic pricing of professional services. There are not many resources available to help guide a person in the development of professional fees. The truth is that development of these fees is a combination of an art and a science and this skill is developed over time.  

Developing options to acquire working capital is also an important tool. One option is to secure a line-of-credit. Credit lines have been used by businesses for years to meet working capital needs. This resource provides a flexible loan from a financial institution that defines a specific amount of money the firm can access as needed and repay either immediately or over time. Lines of credit are often used to cover the gaps in irregular monthly cash flow or to finance a special purchase where it may be difficult to ascertain the exact funds needed in advance.  

AEC firms are some of the most complicated businesses to manage. Success requires a strategic thinking high level person that understands both the design process and the financial management process to oversee financial performance.   

Some important action items needed for strategic financial management include: 

  • Price: Learn from past experience to determine how many hours were spent on similar projects. 
  • Monitor: Regularly monitor projects’ profitability. 
  • Forecast: Obtain accurate projections for the firm’s projects and regularly review them.  
  • Allocate: Allocate staff and resources according to projections.  
  • Process: Create financial processes to support financial management, including project management, billing, change orders, collection, etc. 
  • Focus: Do not micro-manage. Focus on what makes a difference and helps meet financial objectives. 

Closing with great advice from George Washington: “To contract new debts is not the way to pay old ones.” 

Glenn Ebersole is a registered professional engineer and the Director of Business Development at JL Architects, a nationally licensed commercial architecture firm based in West Chester. He can be contacted by [email protected] or 717-575-8572.